In an upcoming article for ifa magazine, GPS Wealth executive director Grahame Evans and managedaccounts.com.au managing director David Heather argue grandfathering is not the only issue hindering movement between licensees.

Reflecting on recent CoreData research that indicated 35 per cent of advisers – and 17.1 per cent of aligned advisers – are contemplating a change, the two executives singled out some chief factors stopping that interest from resulting in real change.

“Breaking up with an institutional dealer doesn’t make financial sense for principals who are focused on succession and maximising the sale price of their business,” they write. “It’s in their best interests to stay especially if lucrative BOLR contracts are in place.”

Mr Evans and Mr Heather argue that while many institutionally-aligned advisers “love to complain” about their respective licensees, that ultimately they can “live with the restrictions and requirements set”.

“The majority of aligned advisers just aren’t uncomfortable enough with the real and perceived perils of vertical integration,” they continue.

In addition, a raft of “unimaginative sweeteners” offered by the big end of town prove too enticing for most, they aregue, listing subsidised dealer fees, marketing allowances, transition payments, access to cheap capital and enhanced buy-back agreements.

Nonetheless, both anticipate a growing group interested in setting up their own AFSLs or joining an independently-owned group in the near future.

“This group of advisers understands that change is unavoidable, constant and essential for progress,” they write. “They want their business to expand and grow and deliver a long-term income stream.”